The first wide-ranging public trial of the UK banking industry's
billion-pound smartcard initiative, which aims to combat card
fraud, will be held in Northampton, it emerged this week.
The UK "chip and Pin" initiative, which banks and retailers have
been discussing for 18 months, is designed to reduce credit and
debit card fraud, which last year rose by 30% to £411m.
Under the initiative, based on smartcard technology from Europay
Mastercard and Visa, a chip will store the cardholder's details and
transactions will be authenticated by Pin not a signature.
Bank payment body Apacs, which co-ordinates the banking industry's
fight against card fraud, said the initiative should more than
halve predicted card fraud losses.
However, some UK retailers have threatened to boycott the
initiative because they feel the cost of new systems, estimated at
£1bn, will outweigh potential benefits.
The British Retail Consortium said it supported the Northampton
trial but added, "Many issues remain to be resolved, not least to
ensure that the massive level of investment to be made by retailers
to introduce the technology can be justified alongside other
customer service improvements."
The trial - which Apacs said is about education rather than
technology - will begin in early 2003 with a country-wide launch in
2005.
Visa scheme cuts e-tailer's liability
Online retailers
that sign up to a new e-payment authentication service from Visa
will no longer be liable for the majority of disputed e-commerce
payments. The liability will shift to the issuing bank, the
financial services giant said last week.
The Verified by Visa service, launched in Europe this week, could
save UK retailers up to £55m a year by reducing the number of
cardholder-disputed transactions by 80%. The service will also
eliminate the associated handling costs that disputes bring by
introducing a password element, the company said.